How Health Insurance Works

Go to this website of premium estimator: (Links to an external site.) , and check the premium of these eight plans.

When you enter the information, assume your annual salary is $100,000 (step one), and your payroll schedule is “Monthly” (step two). Assume you would like to have single coverage for medical insurance (step three), and single coverage for employee prescription drug plan (step four). Click “Calculate Contribution” in step five to see the premium. (Note that in order to obtain the premium information of a plan, you need to choose the specific plan in step three.)

Step 3: Answer the following two questions:

Question 1: Which insurance plan (among the eight plans listed above) has the most expensive premium based on the premium estimator? Which plan has the least expensive premium?

Question 2: Which plan would you like to choose and why? (This is open-ended and there is no right or wrong answer. Feel free to google the definitions of HMO, PPO, tiered plans, and in- vs. out-of-network.)

Sample Solution